CABLE SAYS TECHNOLOGY OPTIONS LIMITED ONLY BY MONEY AVAILABLE
NEW ORLEANS -- Cable operators see so many profitable technology options that their main difficulty is choosing among them, system officials said repeatedly at the NCTA convention that opened here Sun. In fact, questions about the best opportunity elicited at least a half dozen answers from senior cable officials. Best opportunities include PVR- based “media centers,” VoIP, voice telephony in general, more focus on cable modems, new types of video on demand, high definition and video in general, industry officials said. “There is so much out there that we could be doing, and only so much money to do it with,” said Chris Bowick, chief technology officer (CTO) for Cox.
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VoIP is generating a lot of interest, speakers said. Several said VoIP wasn’t ready for prime time a year ago, though Michael LaJoie, CTO of Time Warner, was a believer back then and his firm began preparing for deployment. At the very least, the industry was “still arguing over the nuances” of VoIP a year ago, said Yvette Gordon-Kanouff, corp. vp-strategic planning for SeaChange. Now “this stuff cooks,” LaJoie said of VoIP: “It works and works great. If you were doing a greenfield deployment with no legacy issues today, VoIP wins hands down.” He said because of the amount of legacy equipment that doesn’t mean circuit switched telephony goes away immediately. But Bowick, whose firm has more than a million circuit switched telephony customers, said he’s “doggone close” to ordering his last circuit switch because of the rapid growth of VoIP.
Liberty Media is migrating “fairly rapidly” to VoIP worldwide, said CTO Tony Werner, partly because of its economic advantages, partly because of the new applications such as translation servers that can run on VoIP platforms. He said VoIP will mean “a lot of pressure on incumbent phone companies in a relatively short time.” Charter is “aggressively” deploying VoIP, expecting to make it available to 3 million Charter subscribers by year-end, said COO Maggie Belleville. Patrick Esser, Cox exec. vp-operations, said traditional telephony has been “a very good business” for Cox, but VoIP is “much cheaper” to deploy, especially in smaller markets: “We are very bullish.”
The next big step for cable, and consumer electronics, may be PVR-based media centers, according to Michael Collette, CEO of Ucentric Systems, which produces software for home networking. Time Warner’s LaJoie agreed, saying the multiroom DVR is “exciting” for cable customer retention. Multi-oom PVR functionality is “something the consumers just get,” said Samsung’s Romeo: “It’s the next step in the evolution of PVRs.” Collette said the multiroom PVR systems being deployed are a “pretty big step” toward media centers - - intelligent devices that receive and distribute all types of video, data and voice services throughout a home network. Media centers, for example, would take streaming media from the Internet and display them on HDTV sets, or feed video to any PC or other display device anywhere in the home, through wired or wireless networks. Collette said a media center that included a high-definition PVR would make the cable platform difficult for DBS and other media to compete against.
“We have got to be there” in the media center business, said Sean Bratches, exec. vp of ESPN. He said there “may be some difficulty in managing the monetization of content as it leaps from portal to portal, but that is just something that we will have to deal with.” Frank Romeo, dir. of Samsung’s digital strategy group, predicted dual-system cell phones will help drive VoIP uptake, since they would use traditional wireless networks away from home, but would automatically link to the home VoIP connection at home. Cable modem customers already are interested in home networking. Esser estimated 35% of Cox’s modem customers already have some kind of home network. The figures for other MSOs are lower, but most estimates were at least in the 20-25% range.
ESPN sees big opportunities in taking advantage of cable modems, particularly if they feed through a media center, Bratches said. ESPN already offers a streaming-heavy ESPN Broadband product, but Bratches said the takeup of today’s cable modem services will start to slow because the content is still just narrowband Internet material, delivered faster: “It is not a very video-centric product. There are better ways to use this bandwidth.”
Cable sees big opportunities in true HDTV, as well, Esser said. He said 17% of Cox’s new HD customers had never been cable subscribers, and another 38% upgrade to digital cable. Samsung’s Romeo said high-definition PVRs will be a big driver. Gordon-Kanouff said high-definition video on demand already is technically ready, the only issue is clearing enough cable channel capacity. Comcast is doing trials of high-definition video-on-demand, said Comcast CTO David Fellows: “There are a lot more HD sets out there. We have got to meet the demand.” Time Warner has HDTV available to all of its cable subscribers, Comcast to 90% and Cox to about 85%, officials said, with most systems offering 8-12 channels of high definition.